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Professions unite to oppose tax cap

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The Federal Government is coming under mounting pressure to dump its controversial $2000 cap on tax deductions for self-education expenses amid a groundswell of opposition from organisations representing more than 1.6 million doctors, nurses, engineers, lawyers, accountants and other professionals.

More than 50 peak professional bodies have joined the AMA in its campaign to have the tax change – due to come into force on 1 July 2014 – axed.

AMA President Dr Steve Hambleton met with the leaders of 21 other professional organisations last week to issue a united call for the Government to abandon the proposed tax cap, which he condemned as “a double dose of dumbness”.

“The Government should be encouraging self-education to grow the economy, not setting up road blocks,” Dr Hambleton told the meeting. “It is a tax on education that will make it much harder for doctors to develop and maintain their skills, and make it much more difficult for them to sustain world-best practice in the quality of care they provide.”

The summit, convened by Universities Australia, brought together representatives from organisations including the Law Council of Australia, Engineers Australia, the Australian Institute of Management, the Institute of Chartered Accountants, Rural Doctors of Australia, the Australian Dental Association and the Australian Nursing Federation.

In a joint communiqué, the groups said the tax change was short-sighted and counter-productive, and could undermine future national prosperity.

“At a time when education has never been more important, the measure effectively imposes a tax on learning,” the communiqué said. “The cap threatens Australia’s ability to become a productive, innovative, contemporary knowledge-based economy. [It will] discourage people from being sufficiently prepared for the high-value jobs of a modern services and knowledge-based economy.”

The Government could face parliamentary scrutiny of the tax change, after the Australian Greens flagged a call for a full Senate inquiry into the proposed measure.

Greens leader Senator Christine Milne said the tax cap would require legislation, and warned the Greens would push for the measure to be referred to a Senate committee for investigation.

“The Greens are concerned that, while the current scheme may need better targeting, the $2000 cap is a blunt instrument,” Senator Milne said. “While rorting by some professions is anecdotally reported, that should not outweigh the concerns of people such as nurses from regional areas trying to get training.”

The Greens leader said the tax change would be particularly unfair for professions where costly continuing education is required, and for women trying to re-enter the workforce after having children.

Dr Hambleton congratulated the Greens for taking up the issue, and called on the Government to heed the concerns of a wide range of professions and reverse its course.

So far, more than 11,000 doctors and other health workers have joined the #Scrap the Cap campaign (http://www.scrapthecap.com.au/), signing petitions, sending letters to their local MPs and sharing their stories of how the tax cap will affect their work (see box: The tax cap: voices from the frontline).

The proposed scope of the tax change has heightened fears that it will deter doctors from undertaking training to learn about new techniques and other advances in medical treatment – ultimately undermining the standard of care provide to patients.

In a Discussion Paper released at the end of May, the Government indicated that the full gamut of education-related expenses would count toward the $2000 cap, including tuition and registration fees, textbooks, journals, computers, student union fees, accommodation, running expenses and travel.

Dr Hambleton said that if this was the case, “it will take no time at all for doctors and other professionals to reach the $2000 cap.”

“The cap will make it much harder for doctors to develop and maintain their skills, and to keep up with the latest advances in knowledge and treatment,” Dr Hambleton said. “Ultimately, the cost will be borne by patients, as it makes it much harder for doctors to maintain world-best practice in quality of care.

“This is why the AMA and its members take the issue so seriously, and why we are campaigning hard to make sure the cap is scrapped before it ever comes in.”

Dr Hambleton said doctors in rural areas, and those in highly specialised fields, would be hit particularly hard by the tax cap, because they had no choice but to travel to attend, conferences, workshops and training courses.

So far, the Government has shown no sign of wavering from its plans, and the Opposition has accepted the cap.

Outside the AMA National Conference in late May, Shadow Health Minister Peter Dutton said that although the cap was “bad policy…it is going to be very hard to reversed this and other taxes. This is the situation we face, and it is best to be upfront on that”.

Adrian Rollins